We know that the castle is king these days. Folks are spending more time at home in the wake of the COVID-19 crisis, and that's only accelerating the shift to e-commerce and away from traditional retailers. Chains are struggling, and many won't be around at the other end of this pandemic. Thankfully for investors there are some brick-and-mortar concepts that are doing just fine right now.

RH (NYSE:RH), Target (NYSE:TGT), and Tractor Supply (NASDAQ:TSCO) are some of the physical storefront operators that are thriving in this new normal. Let's see what's making them tick.

A woman with shopping bags riding up an escalator.

Image source: Getty Images.

RH

"Physical retailing is not dead," RH CEO Gary Friedman said on CNBC's Mad Money on Thursday night. "It simply lacks imagination."

He's right, and RH is certainly finding ways to innovate. The luxury furniture retailer hit new highs this week, soaring 20% on Thursday after posting blowout financial results. Revenue was up less than 1%, but with margins expanding, earnings growing at a double-digit percentage clip, and free cash flow more than doubling, it's easy to see why RH is a market darling.

The shelter-in-place phase of the pandemic has made us more aware of furniture that needs updating, but we've seen most conventional furniture and home decor chains buckle under the opportunity. RH calls its stores "galleries" instead of showrooms. It's taking luxury to the point where it curates artisans and designers for the production of its pieces. It's working, and it should continue to work until the upper class feels the pinch of the contracting economy.

RH has a rosy long-term view. The next few quarters may be a little hazy, but its annual net revenue growth target remains 8% to 12% with adjusted earnings climbing 15% to 20% a year. RH feels that it's a on its way to becoming a $20 billion brand, and that would mean the market cap would nearly triple from current levels to get there.

Target

There's a lot to like about Target's cheap chic positioning these days. Its stores sell groceries, hardware, and other essential items so it remained open through the pandemic. However, even after a robust fiscal first quarter no one was expecting the monster quarter it delivered for its fiscal second quarter last month. 

Revenue rose 25%, and margins widened to the point where Target's operating profit soared 74% with its earnings per share skyrocketing 85% for the three months ending in early August. Some of Target's surge in business is coming from e-tail, but digital sales nearly tripling over the past year also includes online orders placed for in-store or curbside pickup. 

Comps have been decelerating as the summer plays out, but with Target already gaining $5 billion in market share through the first half of the year it's hard to bet against that kind of momentum. 

Tractor Supply

Let's close this out with a rural market winner riding a hot trend. Tractor Supply is a growing provider of farming tools, livestock supplies, and pet feed. This may seem like a sleepy niche, but there's a recreational farming boom taking place as folks with ample residential land start to take food supply shortages into their own hands.  

This all adds up to healthy growth for Tractor Supply. Net sales soared 35% in the second quarter, fueled by a 30.5% spike in comps. Back in May Tractor Supply was targeting growth of just 20% to 25%. Earnings per share clocked in 61% higher for the quarter, and that's quite the harvest. 

The near-term outlook calls for more double-digit growth. Tractor Supply sees comparable store sales climbing 12% to 18% higher for the current quarter. No offense to the farm-to-table trend in dining, but Tractor Supply's growth should make farm-to-bank a thing. Right?

Investing in RH, Target, and Tractor Supply has paid off for investors in 2020. They are riding high at a time when many of their fellow consumer discretionary stocks are sliding. It's hard to get excited about brick-and-mortar retail in general, but these three chains are making the best of the challenging situation.